United states

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

[  ] Annual report pursuant to section 13 0r 15(d) of the securities exchange act of 1934

 

For the fiscal year ended________

 

[X] transition report pursuant to section 13 0r 15(d) of the securities exchange act of 1934

 

For the transition period from June 1, 2018 to December 31, 2018

 

Commission file number 000-54875

 

sustainable Projects group inc.
(Exact name of registrant as specified in its charter)

 

Incorporated in the State of Nevada   81-5445107

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

     
225 Banyan Boulevard, Suite 220, Naples, Florida   34102

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 239-307-2925

 

Former fiscal year May 31, 2018

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Name of each exchange on which registered
None   N/A

 

Securities registered pursuant to Section 12(g) of the Act:

 

common shares - $0.0001 par value
(Title of Class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

[  ] Yes [X] No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

[  ] Yes [X] No

 

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act from their obligations under those sections.

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the last 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [  ] Yes [X] No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes [  ] No

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company in Rule 12b-2 of the Exchange Act.

 

Larger accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [X] Smaller reporting company [X]
  Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

[  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

[  ] Yes [X] No

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $16,873,675 (5,113,235 x $3.30)

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

 

Class   Outstanding at November 25, 2019
common shares - $0.0001 par value   7,648,113

 

Documents incorporated by reference: Exhibit 3.1 (Articles of Incorporation); Exhibit 3.2 (By-laws); and Exhibit 3.3 (Certificate of Amendment); all filed as exhibits to SPGX’s registration statement on Form S-1 filed on December 17, 2010; Exhibit 3.4 (Certificate of Amendment) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on December 19, 2016; Exhibit 3.5 (Certificate of Amendment) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on October 26, 2017; Exhibit 10.1 (Share Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on August 11, 2016; Exhibit 10.2 (Property Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on March 17, 2017; Exhibit 10.3 (Deposit Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on July 11, 2017; Exhibit 10.4 (Share Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on July 11, 2017; Exhibit 10.5 (Dividend Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on July 11, 2017; Exhibit 10.6 (Consulting Agreement) filed as an Exhibit to SPGX’s Form 10-K (Annual Report) on August 31, 2017; Exhibit 10.7 (Services Agreement) filed as an Exhibit to SPGX’s Form 10-K (Annual Report) on August 31, 2017; Exhibit 10.8 (Share Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on December 7, 2017; Exhibit 10.9 (Share Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on January 19, 2018; Exhibit 10.10 (Consultant Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on January 19, 2018; Exhibit 10.11 (Share Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on January 31, 2018; Exhibit 10.12 (Asset Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on May 31, 2018; Exhibit 10.13 (Letter of Intent) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on October 3, 2018; Exhibit 10.14 (Shareholder’s Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on October 3, 2018; Exhibit 10.15 (Letter Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on February 14, 2019; Exhibit 10.16 (Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on February 14, 2019; Exhibit 10.17 (Call Option Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on February 14, 2019; Exhibit 10.18 (Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on February 14, 2019; Exhibit 10.19 (Call Option Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on February 14, 2019; Exhibit 10.20 (Shareholder’s Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on March 1, 2019; Exhibit 10.21 (Share Purchase Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on August 29, 2019; Exhibit 10.22 (Employment Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on August 29, 2019; Exhibit 10.23 (Employment Agreement) filed as an Exhibit to SPGX’s Form 8-K (Current Report) on August 29, 2019; and Exhibit 14 (Code of Ethics) filed as an Exhibit to SPGX’s Form S-1 (Registration Statement) on September 13, 2010.

 

 

 

     

 

 

Forward Looking Statements

 

The information in this annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including statements regarding SPGX’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports SPGX’s files with the Securities and Exchange Commission.

 

The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this Form 10-K for the fiscal year ended December 31, 2018 are subject to risks and uncertainties that could cause actual results to differ materially from the results expressed in or implied by the statements contained in this report. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate.

 

All forward-looking statements are made as of the date of filing of this Form 10-K and SPGX disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. SPGX may, from time to time, make oral forward-looking statements. SPGX strongly advises that the above paragraphs and the risk factors described in this Annual Report and in SPGX’s other documents filed with the United States Securities and Exchange Commission should be read for a description of certain factors that could cause the actual results of SPGX to materially differ from those in the oral forward-looking statements. SPGX disclaims any intention or obligation to update or revise any oral or written forward-looking statements whether as a result of new information, future events or otherwise.

 

part I

 

Item 1. Business.

 

(a) Business Development

 

Sustainable Projects Group Inc. (“SPGX”) is a Nevada corporation that was incorporated on September 4, 2009 under the name “Blue Spa Incorporated”. On December 19, 2016, the company changed its name to “Sustainable Petroleum Group Inc.” by a majority vote of its shareholders. On October 25, 2017, the company changed its name to “Sustainable Projects Group Inc.” by a majority vote of its shareholders.

 

SPGX is a business development company engaged in project development and holdings through value based investments and collaborative partnerships with companies across sustainable sectors. It is continually evaluating and acquiring assets for holding and or development. SPGX initiated its goals by pursuing investment and partnerships amongst diversified holdings and companies globally.

 

SPGX maintains its statutory resident agent’s office at 1859 Whitney Mesa Drive, Henderson, Nevada, 89014 and its U.S. headquarters is located at 225 Banyan Boulevard, Suite 220, Naples, Florida, 34102 (phone number 239-307-2925).

 

SPGX has an authorized capital of 500,000,000 common shares with a par value of $0.0001 per share with 7,648,113 common shares issued and outstanding as of November 25, 2019.

 

SPGX has not been involved in any bankruptcy, receivership or similar proceedings. There has been no material reclassification, merger consolidation or purchase or sale of a significant amount of assets not in the ordinary course of SPGX’s business.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 2
   

 

(b) Business of SPGX

 

SPGX is a Nevada company and was incorporated on September 4, 2009. Sustainable Projects Group Inc. (“SPGX”) is a business development company engaged in project development and holdings through value based investments and collaborative partnerships with companies across sustainable sectors:

 

  1. Cormo USA Inc.;
2. Gator Lotto; and
3. Hero Wellness Systems Inc. (fka Vitalizer Americas Inc.)

 

1. Cormo USA Inc.

 

Cormo USA Inc. – Based on a letter of intent and a shareholder agreement, SPGX entered into a joint venture with Cormo AG to assist in the business development of Cormo’s operations in the United States. Cormo AG is in the business of producing and developing peat moss replacement and natural foam products and technologies. Also, for its participation in the joint venture, SPGX will be required to provide certain services, including U.S. business development, management, market research, and determination of potential distribution channels. Under the agreement, Cormo USA Inc has exclusive marketing and distribution rights to Cormo AG’s sustainable agriculture business and suite of patents. Cormo’s technology allows field waste from maize farms to be turned into a variety of products, including peat moss. In May 2019, a site was chosen for its first production facility, with production scheduled to start in early 2020. The joint venture is controlled by Cormo AG (35%) and SPGX (35%) equally with the balance of shares held by eight non-controlling shareholders.

 

See Exhibit 10.13 - Letter of Intent and Exhibit 10.20 - Shareholder’s Agreement for more details.

 

2. Gator Lotto

 

Gator Lotto – In 2018 SPGX acquired all technology assets including source code, graphics, and online assets for US$400,000 through the issuance of new shares. SPGX aims to commercialize this project which features a fully functioning lotto ticket management app (currently in version 2.0) with more than 40,000 downloads. Management plans to spin out this technology into a newly formed partnership within the next 18 months with the aim to increase monetization, user growth and eventual sale or licensing. SPGX spent an additional $11,000 to further develop the technology. See Exhibit 10.12 - Asset Purchase Agreement for more details. The latest version of the Lotto App was launched February 2019. At December 31, 2018, SPGX determined that an impairment of $168,000 was required which approximate its market value. SPGX currently does not have the resources to exploit the app and may consider selling this asset in the future.

 

3. Hero Wellness Systems Inc. (fka Vitalizer Americas Inc.)

 

Hero Wellness Systems Inc. –Pursuant to the terms and conditions of a shareholder’s agreement dated in September, 2018, SPGX entered into a joint venture relationship for the purpose of importing, selling and distributing products offered by Vitalizer International of Switzerland. SPGX’s participation in the joint venture is 55%. SPGX’s role is to provide certain services, including general management and day to day operations of the joint venture. The joint venture is comprised of the following ownership: 55% SPGX, with the balance of ownership held by three non-controlling owners. See Exhibit 10.14 - Shareholder’s Agreement for more details.

 

During the transition period from June 1, 2018 to December 31, 2018, SPGX was involved with the following business ventures, but subsequently has terminated those business ventures or SPGX’s involvement in such venture:

 

Alimex GmbH – Collaborative Partnership

 

Alimex GmbH - On June 28, 2017, SPGX loaned Alimex GmbH $200,000 with a per annum interest rate of 3.5%. Alimex GmbH is a global producer of high-precision aluminium cast plates. Prior to March 1, 2018, SPGX was negotiating terms and conditions of an agreement to continue work with Alimex GmbH. However, on May 2, 2018, SPGX terminated its business relationship with Alimex GmbH. As a result, Alimex GmbH assigned its interest in the loan from SPGX to a third party on the same repayment terms. As of December 31, 2018, the balance and interest owing was $210,692. As of the date of this report, the loan was paid in full.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 3
   

 

Consulting Services - Amixca AG

 

Amixca AG - Effective January 18, 2018 SPGX engaged Amixca AG, a private Swiss corporation, for a period of 36 months commencing February 1, 2018 to January 31, 2021. Amixca AG was to provide business development services to SPGX on projects currently under development and on projects to be rolled out in the next three years. The consulting arrangement was never utilized and Amixca AG did not provide any services. The consulting agreement was annulled and Amixca AG agreed to return the deposit with a payment schedule that spans over a year. The first payment of $20,000 was received on July 16, 2019 and thereafter, payments of $15,455 are due on the first of every month until the full $190,000 has been repaid. As of the date of this report, there remains $29,773 to be paid.

 

MyFactor.io AG

 

Myfactor.io AG - Effective December 4, 2017, SPGX closed a share purchase agreement between Flin Ventures AG and SPGX dated for reference July 25, 2017. SPGX purchased 50,000 shares in the capital of Myfactor.io AG. These shares represent a 100% interest in Myfactor.io AG. As consideration for the purchased shares, SPGX paid EUR$150,000 (US$178,000) to the seller for the purchased shares, subject to the certain conditions being fulfilled by the seller. Prior to closing the seller agreed to arrange payment or settlement of all debt owed (EUR$70,000 or US$83,496) by myfactor.io AG and to have Myfactor.io AG buy back all outstanding bonds issued by Myfactor.io AG. Also, as a condition of closing the seller was required to replace the board of directors of Myfactor.io AG with nominees of SPGX and to have the shares transferred and registered in the name of SPGX. Myfactor.io AG share purchase agreement was completed and made effective December 4, 2017. See Exhibit 10.8 - Share Purchase Agreement for more details. Myfactor.io AG is a company incorporated in Liechtenstein and it holds a bond with its primary focus in the development and growth of small to medium enterprises in such sectors as real estate, patents and other industrial property rights. SPGX treated the purchase as an asset held for sale, and subsequently, sold the investment of myfactor.io for EUR$220,000 on May 31, 2018. See Exhibit 10.21 - Share Purchase Agreement for more details.

 

Thunder Bay Mineral Claims

 

Thunder Bay Claims - SPGX had planned to complete two 2,000 meter diamond drill programs on the Thunder Bay Claims by the end of 2018 at an estimated cost of $1.2 million. The two programs would have required approximately 80 days to complete. One drill program would have been conducted on the Foisey claims of the Thunder Bay Claims to test the north branching arm of a gold-bearing breccia system. The second drill program would have been conducted on gold-mineralized zones on the Thunder Bay claims, which have been identified from previous and historic work. During the period ended December 31, 2018, SPGX disposed the investment of the Thunder Bay Claims to focus more on other projects in the field of sustainability. The mineral properties claims located in the Thunder Bay Mining Division in the townships of Rickaby and Lapierre, Ontario, Canada were returned back to its original owner, John Leliever, with the negotiated return of 1,052,631 common shares of SPGX for cancellation on December 31, 2018. SPGX calculated the re-acquisition of the 1,052,631 common shares and recorded an impairment of $276,318.

 

Products / Segments

 

SPGX is specialized in founding joint venture partnerships with European companies seeking to expand into the United States. These joint ventures largely take place in the field of sustainability which under SPGX’s definition includes fields such as health, agriculture, renewable products, and other brands.

 

Markets

 

1. Cormo USA Inc.

 

Cormo USA Inc. is currently in its development stage and in the process of establishing the first pilot project in the United States. Cormo intends to utilize the substantial corn production volume in the U.S. to gain a foothold in the agricultural industry and provide a revenue source for struggling farmers. Likewise, Cormo offers a viable alternative to harvested peat moss, a major source of carbon dioxide (CO2). Major consumers of peat moss, such as the horticultural industry are looking for a stable, price beneficial solution for their peat moss needs. At this time Cormo has initiated early discussions with several major industry partners and peat moss consumers. The markets Cormo is focusing on are in the field of peat moss substitute, fertilizer products, and further agricultural products.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 4
   

 

2. Gator Lotto

 

The product currently covers lottery players in the state of Florida. The app is available for download on Android (google play) and iOS (App Store) and its associated website www.gatorlotto.com. The app is currently in Version 2.0 offering stable optical character recognition of all major lottery games offered in the state of Florida, with real time updates.

 

3. Hero Wellness Systems Inc.

 

Hero Wellness Systems Inc. – SPGX is focused on the retail and B2B market segment of the lifestyle and healthcare markets. B2B clients consist, but are not limited to Hotels & Hospitality and Entertainment Venues in the United States. Additionally Hero is active in the distribution of its Hero Chroma massage chair through its webstore www.herochroma.com and additional websites operated by the company. Additionally, Hero is in discussions with several brick and mortar retail furniture, specialty sports and massage equipment establishments.

 

Distribution Methods

 

1. Cormo USA Inc.

 

It is anticipated that Cormo USA Inc. will distribute products, both B2B and B2C. A large focus will be through long term supply contracts with B2B customers.

 

2. Gator Lotto

 

Gator Lotto – the app is available for download in the iOS and Android App Stores.

 

3. Hero Wellness Systems Inc.

 

Hero Wellness Systems Inc. – distribution through B2B and B2C direct sales, as well as through online channels and product expos.

 

Status of Products

 

1. Cormo USA Inc.

 

The design and engineering phase for the first commercial production facility is currently underway with completion anticipated in 2020. Proof of concept of the end product as well as commercial viability have been established previously by SPGX’s joint venture partner, Cormo AG in Switzerland. Cormo USA anticipates sales of first products during the year 2020, as well as have sufficient supplies for testing corporations with potential industry partners.

 

2. Gator Lotto

 

Gator Lotto – the app is currently fully functional and available for download in version 2.0.

 

3. Hero Wellness Systems Inc.

 

Hero Wellness Systems Inc. – The product has currently receiving final ETL approval and is authorized to be sold in the United States. First deliveries from the supplier have been received in August of 2019. First delivery to customer has taken place in August of 2019.

 

Competitive Conditions

 

1. Cormo USA Inc.

 

The main competition for Cormo stems from mined peat moss and a small palette of peat moss substitutes. Given the need to produce more ecologically friendly means of peat moss consumption there is a current trend to switch to sustainable peat most alternatives. Management believes that Cormo has a competitive advantage in terms of pricing and quality.

 

2. Gator Lotto

 

Several lotto related apps exist in a fragmented market with no clear market leader.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 5
   

 

3. Hero Wellness Systems Inc.

 

Hero Wellness Systems Inc. – There is significant competition in the field of massage chairs and healthcare systems. SPGX considers 13 models currently on the market as strong competitors, but believe Vitalizer offers a superior product.

 

Raw Materials

 

SPGX currently has no business operations that require raw materials, and does not produce any products or provide any services that require any raw materials or any suppliers with the exception of the following:

 

1. Cormo USA Inc.

 

Cormo USA Inc. relies on the availability of agricultural waste products produced by maize and corn harvests.

 

2. Hero Wellness Systems Inc.

 

Hero Wellness Systems Inc. receives finished products from its supplier in China.

 

Principal Suppliers

 

1. Cormo USA Inc.

 

As of the date of this filing, neither SPGX nor Cormo USA Inc. have any principal suppliers. SPGX has been active in building relationships with local farmers in the vicinity of the future Rushville, Indiana production facility. Through a diversified sourcing strategy the company does not have a dependence on a singular supplier.

 

2. Hero Wellness Systems Inc.

 

Hero Wellness Systems Inc. receives finished products from its supplier in China.

 

Dependence on Major Customers

 

As of the date of this filing, neither SPGX nor Cormo USA Inc. are dependent on any major customers.

 

Patents/Trade Marks/Licences/Franchises/Concessions/Royalty Agreements or Labour Contracts

 

SPGX has an interest in the following intellectual property:

 

Cormo USA Inc. - Cormo AG has patents and trademarks relating to the intellectual property of ‘Cormo AG’s process and for the protection of brand name TEFA, BABS and Cormo. In addition, Cormo USA Inc. is the owner of the US Trademark for “TEFA” (Serial Number: 88380930). As part of the license agreement between Cormo AG and Cormo USA Inc., Cormo USA Inc. has (1) the full use of the patent “Method for the production of superabsorbent pellets and/or a fibrous material from crop residues” (Patent Number US 15/314,119); (2) the full use of the Trademarks “TEFA”, “BABS” and Cormo; and (3) the exclusive use of the rights of the Cormo technology in the NAFTA region. Also, the license agreement includes all present and future process improvements, as well as product applications and related know-how of Cormo AG. Additionally, Cormo USA Inc. has been granted the right by Cormo AG to sub-license the technology to potential partners in the NAFTA region.

 

Gator Lotto - There are no registered patents or trademarks for this project, but SPGX holds the intellectual property for this technology.

 

Government Controls and Regulations

 

SPGX’s various business segments are subject to various levels of government controls and regulations, which are supplemented and revised from time to time. Currently, SPGX is in compliance with all business and operations licenses that are typically applicable to most commercial ventures. However, management is unable to predict what additional legislation or revisions may be proposed that might affect its business or when any such proposals, if enacted, might become effective. There can be no assurance that existing or new laws or regulations that may be adopted in various jurisdictions in the future, will not impose additional fees and taxes on SPGX and its business operations. Management is not aware of any such revisions to existing laws and regulations nor new laws or regulations that could have a negative impact on SPGX’s business and add additional costs to SPGX’s business operations. Such changes, however, could require increased capital and operating expenditures and could prevent or delay certain operations by SPGX.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 6
   

 

The effect of these existing regulations on the business segments is that SPGX is able to carry out its current business operations as planned. However, it is possible that future governments could change the regulations that could affect the business operations and limit SPGX’s ability to continue its business operations.

 

Expenditures on Research and Development During the Last Two Fiscal Years

 

Since September 4, 2009, SPGX has not spent any funds on either company-sponsored research and development activities or customer-sponsored research activities relating to the development of new products, services or techniques or the improvement of existing products, services, or techniques with the exception of the following:

 

Gator Lotto - SPGX spent an additional $11,000 to further develop this technology before it was launched in February 2019.

 

Number of Total Employees and Number of Full Time Employees

 

SPGX currently has three full time employees. In each segment of its plan of operations, SPGX intends to retain the services of key management to assist in the various aspects of its business operations, such consulting services, and ongoing business development.

 

Item 1A. Risk Factors.

 

SPGX is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

Item 1B. Unresolved Staff Comments.

 

SPGX is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

Item 2. Properties.

 

SPGX maintains its U.S. headquarters at 225 Banyan Boulevard, Suite 220, Naples, Florida, 34102. SPGX entered into an office lease effective September 1, 2018 for its office in Naples, Florida. The lease expires March 31, 2021.

 

Item 3. Legal Proceedings.

 

SPGX is not a party to any pending legal proceedings and, to the best of SPGX’s knowledge, none of SPGX’s property or assets are the subject of any pending legal proceedings.

 

Item 4. Mine Safety Disclosure.

 

SPGX is not involved in the operation of any mine, and as a result is not required to provide the information required under this item.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 7
   

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

(a) Market Information

 

SPGX’s common shares were quoted on the OTCQB under the symbol “BUES” from October 28, 2013 to December 19, 2016. From December 19, 2016 to October 17, 2018 SPGX’s common shares were quoted on the OTCQB under the symbol “SPGX”. Since October 17, 2018 SPGX’s common shares have been quoted on the OTC Pink under the symbol “SPGX”. The table below gives the high and low bid information for each fiscal quarter of trading for the last three fiscal years and for the interim period ended November 25, 2019. The bid information was obtained from Pink OTC Markets Inc. and reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

 

High & Low Bids  
Period ended   High     Low     Source  
25 November 2019   $ 4.00     $ 4.00     OTC Markets Group Inc.  
30 September 2019   $ 4.00     $ 4.00     OTC Markets Group Inc.  
30 June 2019   $ 1.50     $ 1.50     OTC Markets Group Inc.  
31 March 2019   $ 3.01     $ 3.01     OTC Markets Group Inc.  
31 December 2018   $ 3.30     $ 3.30     OTC Markets Group Inc.  
30 November 2018   $ 3.30     $ 3.30     OTC Markets Group Inc.  
31 August 2018   $ 3.02     $ 3.02     OTC Markets Group Inc.  
31 May 2018   $ 3.50     $ 3.50     OTC Markets Group Inc.  
28 February 2018   $ 3.99     $ 3.99     OTC Markets Group Inc.  
30 November 2017   $ 3.90     $ 3.90     OTC Markets Group Inc.  
31 August 2017   $ 2.60     $ 2.60     OTC Markets Group Inc.  
31 May 2017   $ 3.50     $ 2.35     Pink OTC Markets Inc.  
28 February 2017   $ 2.60     $ 2.35     Pink OTC Markets Inc.  

 

(b) Holders of Record

 

SPGX had 90 holders of record of SPGX’s common shares as of December 31, 2018.

 

(c) Dividends

 

SPGX has declared no dividends on its common shares, and is not subject to any restrictions that limit its ability to pay dividends on its common shares. Dividends are declared at the sole discretion of SPGX’s Board of Directors.

 

(d) Recent Sales of Unregistered Securities

 

There have been no sales of unregistered securities within the last three years that would be required to be disclosed pursuant to Item 701 of Regulation S-K, with the exception of the following:

 

March 13, 2017 – Acquisition of Mineral Claims

 

On March 13, 2017, the board of directors authorized the issuance of 1,250,000 restricted shares of common stock as consideration for the acquisition of 13 mineral claims valued at $3,750,000 (CDN$5,000,000). See Exhibit 10.2 - Property Purchase Agreement for more details. SPGX relied upon Section 4(2) of the Securities Act of 1933 to issue the restricted shares in a private transaction. The share certificate representing the shares has been legended with the applicable trading restrictions. On December 28, 2018, SPGX entered into an agreement and returned the claims to its original owner in exchange for the return of 1,052,631 shares of common stock for cancellation.

 

April 2017 - $3.00 Private Placement Offering

 

On April 6, 2017 the board of directors authorized the issuance of 13,332 restricted shares of common stock at an offering price of $3.00 per restricted share. SPGX raised $39,996 in cash in this offering, and issued an aggregate 13,332 restricted shares of common stock to two non-US subscribers outside the United States.

 

SPGX set the value of the restricted shares arbitrarily without reference to its assets, book value, revenues or other established criteria of value. All the restricted shares issued in this offering were issued for investment purposes in a “private transaction”.

 

For the two non-US subscribers outside the United States in this one closing, SPGX relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission. Management is satisfied that SPGX complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offerings were not public offerings and were not accompanied by any general advertisement or any general solicitation. SPGX received from each of the two subscribers a completed and signed subscription agreement containing certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the resale of the shares with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 8
   

 

June 23, 2017 – Acquisition of Lease Deposit

 

On June 23, 2017, the board of directors authorized the issuance of 400,000 restricted shares of common stock as consideration for the acquisition of a lease deposit for office space valued at $600,000. See Exhibit 10.3 - Deposit Agreement for more details. SPGX relied upon Section 4(2) of the Securities Act of 1933 to issue the restricted shares in a private transaction. The share certificate representing the shares has been legended with the applicable trading restrictions. On December 31, 2018, SPGX terminated the lease deposit for its office space and the 400,000 restricted shares were returned back for cancellation.

 

July 2017 - $3.50 Private Placement Offering

 

On July 3, 2017 the board of directors authorized the issuance of 31,128 restricted shares of common stock at an offering price of $3.50 per restricted share. SPGX raised $108,948 in cash in this offering, and issued an aggregate 31,128 restricted shares of common stock to four non-US subscribers outside the United States.

 

Also on July 6, 2017, the board of directors authorized the issuance of, as part of this same offering, 6,000 restricted shares of common stock as payment of $21,000 for shares in SP Group AG. See Exhibit 10.4 - Share purchase Agreement for more details.

 

Also on July 6, 2017, the board of directors authorized the issuance of, as part of this same offering, 10,000 restricted shares of common stock as settlement of $35,000 of debt owed to a creditor of the company, who had previously provided services to SPGX.

 

Also, on July 25, 2017 the board of directors authorized the issuance of, as part of this same offering, 78,761 restricted shares of common stock at an offering price of $3.50 per restricted share. SPGX raised $275,348 in cash in this offering, and issued an aggregate 78,671 restricted shares of common stock to 26 non-US subscribers outside the United States.

 

SPGX set the value of the restricted shares arbitrarily without reference to its assets, book value, revenues or other established criteria of value. All the restricted shares issued in this offering were issued for investment purposes in a “private transaction”.

 

For each of these closings, SPGX relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission. Management is satisfied that SPGX complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offerings were not public offerings and were not accompanied by any general advertisement or any general solicitation. SPGX received from each of the subscribers a completed and signed subscription agreement containing certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the resale of the shares with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.

 

July 2017 - $3.00 Debt Settlement

 

On July 31, 2017 the board of directors authorized the issuance of 101,778 restricted shares of common stock as settlement of an aggregate $305,331 of debt owed to six creditors of the company at a settlement price of $3.00 per restricted share. The $305,331 represented the principal and interest due and owing on outstanding loans. The 101,778 restricted shares of common stock were issued to six non-US creditors outside the United States.

 

SPGX set the value of the restricted shares arbitrarily without reference to its assets, book value, revenues or other established criteria of value. All the restricted shares issued in this settlement were issued for investment purposes in a “private transaction”.

 

For the six non-US creditors outside the United States in this one closing, SPGX relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission. Management is satisfied that SPGX complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offerings were not public offerings and were not accompanied by any general advertisement or any general solicitation. SPGX received from each of the six subscribers a completed and signed debt settlement agreement containing certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the resale of the shares with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 9
   

 

August 1, 2017 – Services Agreement

 

On August 1, 2017, the board of directors authorized the issuance of 16,000 restricted shares of common stock as consideration for services to be provided by Dr. Philip Grothe in accordance with the terms and conditions of the Services Agreement. See Exhibit 10.7 - Services Agreement for more details. SPGX relied upon Section 4(2) of the Securities Act of 1933 to issue the restricted shares in a private transaction. The share certificate representing the shares has been legended with the applicable trading restrictions.

 

September 2017 - $3.50 Private Placement Offering

 

On September 21, 2017 the board of directors authorized the issuance of 40,609 restricted shares of common stock at an offering price of $3.50 per restricted share. SPGX raised $142,138 in cash in this offering, and issued an aggregate 40,609 restricted shares of common stock to 16 non-US subscribers outside the United States.

 

Also, on December 11, 2017 the board of directors authorized the issuance of, as part of this same offering, 1,000 restricted shares of common stock at an offering price of $3.50 per restricted share. SPGX raised $3,500 in cash in this offering, and issued an aggregate 1,000 restricted shares of common stock to one non-US subscriber outside the United States.

 

SPGX set the value of the restricted shares arbitrarily without reference to its assets, book value, revenues or other established criteria of value. All the restricted shares issued in this offering were issued for investment purposes in a “private transaction”.

 

For the 17 non-US subscribers outside the United States in these two closings, SPGX relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission. Management is satisfied that SPGX complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offerings were not public offerings and were not accompanied by any general advertisement or any general solicitation. SPGX received from each of the 17 subscribers a completed and signed subscription agreement containing certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the resale of the shares with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.

 

December 2017 - $4.00 Private Placement Offering

 

On December 11, 2017 the board of directors authorized the issuance of 6,500 restricted shares of common stock at an offering price of $4.00 per restricted share. SPGX raised $26,000 in cash in this offering, and issued an aggregate 6,500 restricted shares of common stock to two non-US subscribers outside the United States.

 

SPGX set the value of the restricted shares arbitrarily without reference to its assets, book value, revenues or other established criteria of value. All the restricted shares issued in this offering were issued for investment purposes in a “private transaction”.

 

For the two non-US subscribers outside the United States in this one closing, SPGX relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission. Management is satisfied that SPGX complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offerings were not public offerings and were not accompanied by any general advertisement or any general solicitation. SPGX received from the each of the subscribers a completed and signed subscription agreement containing certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the resale of the shares with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.

 

December 2017 - $4.00 Debt Settlement

 

In December 2017 the board of directors authorized the issuance of 25,000 restricted shares of common stock as settlement of $100,000 of debt owed to one creditor of SPGX at a settlement price of $4.00 per restricted share. The $100,000 represented the principal and interest due and owing on an outstanding loan related to the purchase of myfactor.ioAG.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 10
   

 

SPGX set the value of the restricted shares arbitrarily without reference to its assets, book value, revenues or other established criteria of value. All the restricted shares issued in this settlement were issued for investment purposes in a “private transaction”.

 

For the issuance of the restricted shares to the creditor, SPGX relied upon Section 4(2) of the Securities Act of 1933. Management is satisfied that SPGX complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offering was not a public offering and was not accompanied by any general advertisement or any general solicitation. The share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.

 

January 30, 2018 – Acquisition of Falcon Projects AG

 

On January 30, 2018, the board of directors authorized the issuance of 10,000 restricted shares of common stock as consideration for the acquisition of 10 shares in the capital of Falcon Projects AG valued at $42,000. See Exhibit 10.11 - Share Purchase Agreement for more details. SPGX relied upon Section 4(2) of the Securities Act of 1933 to issue the restricted shares in a private transaction. The share certificate representing the shares has been legended with the applicable trading restrictions. SPGX subsequently sold all of the Falcon Projects AG shares for $11,000 on December 26, 2018.

 

May 25, 2018 – Acquisition of Gator Lotto App

 

On May 25, 2018, the board of directors authorized the issuance of 100,000 restricted shares of common stock as consideration for the acquisition of the Gator Lotto app from Global Gaming Media Inc., valued at $400,000. See Exhibit 10.12 - Asset Purchase Agreement for more details. SPGX relied upon Section 4(2) of the Securities Act of 1933 to issue the restricted shares in a private transaction. The share certificate representing the shares has been legended with the applicable trading restrictions.

 

December 2018 - $3.30 Debt Settlement

 

In December 2018 the board of directors authorized the issuance of 10,001 restricted shares of common stock as settlement of $33,001 of debt owed to two shareholders of SPGX at a price of $3.30 per restricted share. The $33,001 was out-of-pocket expenses that two shareholders paid on behalf of SPGX.

 

Currently, there are no outstanding options or warrants to purchase, or securities convertible into, shares of SPGX’s common shares.

 

(e) Penny Stock Rules

 

Trading in SPGX’s common shares is subject to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends SPGX’s common shares to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in SPGX’s securities, which could severely limit their market price and liquidity of SPGX’s securities. The application of the “penny stock” rules may affect your ability to resell SPGX’s securities.

 

Item 6. Selected Financial Data.

 

SPGX is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 11
   

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

THE FOLLOWING PRESENTATION OF THE PLAN OF OPERATION OF SUSTAINABLE Projects GROUP INC. SHOULD BE READ IN CONJUNCTION WITH THE AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.

 

Overview

 

SPGX is a business development company engaged in project development and holdings through value based investments and collaborative partnerships with companies across sustainable sectors. It is continually evaluating and acquiring assets for holding and or development. SPGX initiated its goals by pursuing investment and partnerships amongst diversified holdings and companies globally. SPGX is currently involved in the following businesses: (1) Consulting Services; and (2) Collaborative partnerships.

 

Plan of Operation

 

SPGX’s plan of operation for the next 12 months is to continue to evaluate and acquire assets and partnerships for holding or business development activities, and to collaborate, develop and create new assets with a continued focus on sustainability. SPGX is currently evaluating other projects to find attractive partnerships to expand SPGX’s business development activities. Other projects of interest that management is currently researching are in the field of sustainability.

 

Accounting and Audit Plan

 

SPGX has retained a CPA to assist in the bookkeeping and organization of SPGX’s financial records. SPGX’s accountant is expected to charge SPGX approximately $20,000 to maintain SPGX’s financial records for the next 12 months. SPGX’s independent auditor is expected to charge approximately $3,500 to review each of SPGX’s quarterly financial statements and approximately $28,000 to audit SPGX’s annual financial statements. In the next 12 months, SPGX anticipates spending approximately $48,000 to pay for its accounting and audit requirements.

 

SEC Filing Plan

 

As a reporting company, SPGX is required to file documents with the US Securities and Exchange Commission on a quarterly basis. SPGX expects to incur filing costs of approximately $4,000 per quarter to support its quarterly and annual filings. In the next 12 months, SPGX anticipates spending approximately $16,000 for filing costs to pay for three quarterly filings and one annual filing.

 

As at December 31, 2018, SPGX had $249,675 cash and a working capital of $675,830. Accordingly, SPGX will require additional financing to fund its obligations as a reporting company under the Securities Act of 1934 and its general and administrative expenses for the next 12 months.

 

Financial Condition

 

As at December 31, 2018, SPGX had a cash balance of $249,675, compared to a cash balance of $1,419 as of May 31, 2018 and cash balance of $161,096 as of May 31, 2017. Management will be able to better assess the anticipated revenues once the production of its holding starts in 2020. If additional funds are required, additional funding will come from equity financing from the sale of SPGX’s common shares or from debt financing. If SPGX is successful in completing an equity financing, existing shareholders will experience dilution of their interest in SPGX. Management cannot provide investors with any assurance that SPGX will be able to raise sufficient funding from the sale of its common shares or from debt financing to fund its plan of operations. In the absence of any required funding, SPGX will not be able to execute its plan of operation and its business plan will fail. Even if SPGX is successful in obtaining the required financing and executes its plan of operation, if SPGX does not continue to obtain additional financing, it will be forced to abandon its business and plan of operations.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 12
   

 

Based on the nature of SPGX’s business, management anticipates incurring operating losses in the foreseeable future. Management bases this expectation, in part, on the fact that SPGX will continue to acquire business assets. SPGX’s future financial results are also uncertain due to a number of factors, some of which are outside its control. These factors include, but are not limited to:

 

SPGX’s ability to raise additional funding; and
The ability to find new projects;
The cost of maintaining or developing current assets.

 

Due to SPGX’s lack of operating history and present inability to generate consistent revenues, SPGX’s auditors have stated their opinion that there currently exists a substantial doubt about SPGX’s ability to continue as a going concern

 

Liquidity and Capital Resources

 

As of December 31, 2018, SPGX had total assets of $2,188,730, and a working capital of $675,830, compared with a working capital of $976,589 as of May 31, 2018 and a working capital deficit of $213,788 as of May 31, 2017. The increase in the working capital was primarily due to current assets received through issuance of common stock and notes payable converted to common stock. The assets primarily consisted of $249,675 in cash and $596,535 in other receivables from a related party.

 

Net Cash Used in Operating Activities

 

During the transition period from June 1, 2018 to December 31, 2018, net cash used in operating activities was $382,399 compared with ($238,861) for the same period to December 31, 2017, ($303,012) for the fiscal year ended May 31, 2018 and ($38,399) for the fiscal year ended May 31, 2017. The increase in cash used in operating activities is related to costs incurred to maintain the operations of the Company and the costs of setting up the two joint ventures.

 

Net Cash Used in Investing Activities

 

During the transition period from June 1, 2018 to December 31, 2018 net cash used in investing activities was $704,020 as compared with cash flow from investing activities of $238,861 for the same period ended December 31, 2017, and $452,996 for the fiscal year ended May 31, 2018. The net cash used in investing activities was primarily due to the acquisition of assets and proceeds from the sale of investments.

 

Net Cash Generated from Financing Activities

 

During the transition period from June 1, 2018 to December 31, 2018 net cash flows provided from financing activities was $1,334,675 as compared with financing activities of $566,830 for the same period ended December 31, 2017, $596,331 for the fiscal year ended May 31, 2018 and $199,495 for the fiscal year ended May 31, 2017. The $1,334,675 is the total non controlling interest from the two joint ventures. The prior periods net cash used in financing activities was due to proceeds from issuance of common shares and proceeds from notes payable.

 

Results of Operation for the transition period from June 1, 2018 to December 31, 2018

 

SPGX had operating revenues of $278,500 during the transition period from June 1, 2018 to December 31, 2018 as compared with operating revenues of $30,000 for the same period ended December 31, 2017, $65,000 for the fiscal year ended May 31, 2018 and $5,000 for the fiscal year ended May 31, 2017. The increase in revenues were primarily generated from providing services to a related party for research activities relating to the development of new products, services or techniques and providing due diligence and market analysis reporting.

 

There were substantial changes between the transition period from June 1, 2018 to December 31, 2018 and its fiscal years ended May 31, 2018 and May 31, 2017. SPGX changed its business focus to pursue investments, partnerships and collaboration across sustainable sectors. SPGX plans to establish strategic business projects in sustainable fields. With the new acquisitions of assets and investments and hire of new employees, SPGX expected the increase in operation expenditures to develop and build the business. At the same time, SPGX continued success and existence will be impacted if SPGX is not able to obtain enough capital through the services it provides or obtain enough capital through additional equity financing.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 13
   

 

References to the discussion below to fiscal 2018 are to SPGX’s transition period from June 1, 2018 to December 31, 2018 and its fiscal year ended on May 31, 2018. References to fiscal 2017 are to SPGX’s fiscal year ended May 31, 2017.

 

    For the seven     For the     For the seven     For the  
    months ended     year ended     months ended     year ended  
    December 31,     May 31,     December 31,     May 31,  
    2018     2018     2017     2017  
Revenues                                
Revenues   $ 278,500     $ 65,000     $ 30,000     $ 5,000  
                                 
Operating Expenses                                
Administrative and other operating expenses   $ 57,721     $ 36,500     $ 21,383     $ 23,719  
Advertising and Promotion     9,616       4,763       3,765       5,559  
Depreciation     4,962       3,208       1,458       -  
Consulting fees     49,500       42,000       24,500       -  
Management fees     56,090       88,040       70,100       3,625  
Professional fees     129,150       113,346       71,514       58,154  
Rent     12,279       3,250       2,000       750  
Salaries and wages     173,805       -       -       -  
Travel     27,423       -       -       -  
Amortized right of use assets     24,117       -       -       -  
Loss/Gain on disposition of assets     1,069       30,596       -       -  
Loss on debt extinguishment     -       76,334       76,334       -  
Loss on acquisition of deposit     -       779,278       779,278       -  
Total Expenses   $ 545,732     $ 1,177,315     $ 1,050,332     $ 91,807  
                                 
Operating income/loss before interest expense and impairment     (267,232 )     (1,112,315 )     (1,020,332 )     (86,807 )
Other interest income     4,229       6,463       2,973       -  
Interest expense     -       (2,727 )     (2,727 )     (14,478 )
Impairment     (168,000 )     (307,318 )     -       -  
                                 
Operating loss before income taxes   $ (431,003 )   $ (1,415,897 )   $ (1,020,086 )   $ (101,285 )

 

General and Administrative

 

General and administrative expenses are the general office and operational expenses of SPGX. They include, but not limited to, bank charges, general office expenses, and filing and transfer agent fees.

 

Off-Balance Sheet Arrangements

 

SPGX has no off-balance sheet arrangements including arrangements that would affect its liquidity, capital resources, market risk support and credit risk support or other benefits.

 

Material Commitments for Capital Expenditures

 

SPGX had no contingencies or long-term commitments at December 31, 2018.

 

Tabular Disclosure of Contractual Obligations

 

SPGX is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 14
   

 

Significant Accounting Policies

 

SPGX’s financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Management believes that understanding the basis and nature of the estimates and assumptions involved with the following aspects of SPGX’s financial statements is critical to an understanding of SPGX’s financial statements.

 

Going Concern

 

SPGX has limited operations and has sustained operating losses resulting in a deficit. In view of these matters, realization values may be substantially different from carrying values as shown. SPGX has accumulated a deficit of $2,108,371 since inception and has yet to achieve profitable operations and further losses are anticipated in the development of its business. SPGX’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations when they come due. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. SPGX has $249,675 cash on hand as at December 31, 2018. Cash provided by operations was $952,276 for the seven-month period ended December 31, 2018. Therefore, SPGX will need to raise additional cash in order to fund ongoing operations over the next 12-month period. SPGX may seek additional equity as necessary and it expects to raise funds through private or public equity investment in order to support existing operations and expand the range of its business. There is no assurance that such additional funds will be available for SPGX on acceptable terms, if at all.

 

Equity Investments

 

SPGX invests in equity securities of public and non-public companies for business and strategic purposes. Investments in public companies are carried at fair value based on quoted market prices. Investments in equity securities without readily determinable fair values are carried at cost, minus impairment, if any. SPGX reviews its equity securities without readily determinable fair values on a regular basis to determine if the investment is impaired. For purposes of this assessment, SPGX considers the investee’s cash position, earnings and revenue outlook, liquidity and management ownership, and among other factors in its review. If management’s assessment indicates that an impairment exists, SPGX estimates the fair value of the equity investment and recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the equity investment and its’ carrying amount.

 

Foreign currency translations

 

SPGX maintains an office in Naples, Florida. The functional currency of SPGX is the U.S. Dollar. At the transaction date, each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are re-measured by using the exchange rate in effect at that date.

 

Accounts Receivables

 

Trade accounts receivable are stated at the amount SPGX expects to collect. Management considers the following factors when determining the collectability of specific customer accounts: customer credit worthiness, past transaction history, current economic industry trends and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. Based on the management’s assessment, SPGX provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after SPGX has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. There are no receivables considered uncollectible as of December 31, 2018.

 

Stock based compensation

 

SPGX follows the guideline under ASC 718, Stock Compensation. The standard provides that for all stock based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, which requires that all share-based payments to both employees and directors be recognized in the income statement based on their fair values. For non-employees stock based compensation, SPGX applies ASC 505 Equity-Based Payments to Non-employees. This standard provides that all stock based compensation related to non-employees be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be most reliably be measured or determinable.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 15
   

 

Revenue Recognition

 

In May 2014, the FASB issued guidance on the recognition of Revenue from Contracts with Customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.

 

The Company adopted the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), from June 01, 2018 using the modified retrospective method. Revenues for the year ended December 31, 2018 were not adjusted. The adoption of Topic 606 did not have a material impact to the Company’s financial statements. The Company recognizes revenue when the Company transfers promised services to the customer. The performance obligation is the monthly services rendered. The Company has one main revenue source which is providing consulting services. Accordingly, the Company recognizes revenue from consulting services when the Company’s performance obligation is complete. Where there is a contract for services, the Company performs the obligations and bills monthly for its services as rendered. Where there is no contract, the Company performs the obligation and/or service and recognize revenues as provided. Even though the Company entered into contract with the customer, the contract could be terminated at any time with notice. The Company may receive payments from customers in advance of the satisfaction of performance obligations for services. These advance payments are recognized as deferred revenue until the performance obligations are completed and then, recognized as revenues. The Company has one contract with one related party customer where a time period required for notice of termination. Termination penalties are non-substantive and can be performed by either party. As at December 31, 2018, all of the revenues were from related parties.

 

Operating Leases

 

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”). The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with an initial term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the term of the lease. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. SPGX adopted the new standard June 01, 2018. SPGX will also elect to not recognize lease assets and lease liabilities for leases with an initial term of 12 months or less.

 

Recently issued accounting pronouncements:

 

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses”. The provision sets forth a “current expected credit loss” (CECL) model which requires SPGX to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This provision is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. Recently, the FASB is expected to issue the final ASU to delay adoption for smaller reporting companies to calendar year 2023. SPGX is currently evaluating the impact of adopting this guidance.

 

In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting”, which is intended to improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. Under the new standard, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when conditions necessary to earn the right to benefit from the instruments have been satisfied. These equity-classified nonemployee share-based payment awards are measured at the grant date. Consistent with the accounting for employee share-based payment awards, an entity considers the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. The new standard also eliminates the requirement to reassess classification of such awards upon vesting. The new standard is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. The adoption of this new standard does not have an impact on SPGX’s financial statements.

 

SPGX adopts new pronouncements relating to generally accepted accounting principles applicable to SPGX as they are issued, which may be in advance of their effective date. Management does not believe that any pronouncement not yet effective but recently issued would, if adopted, have a material effect on the accompanying financial statements.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

SPGX is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 16
   

 

Item 8. Financial Statements and Supplementary Data.

 

SUSTAINABLE projects GROUP INC.

 

Financial Statements

 

for the seven months ended december 31, 2018 and december 31, 2017 and

for the years ended May 31, 2018 and may 31, 2017

 

index to the consolidated financial statements

 

  PAGES
Report of Independent Accountant (2018) 1
   
Report of Independent Accountant (2017) 2
   
Consolidated Balance Sheets 3
   
Consolidated Statements of Operations and Comprehensive Loss 4
   
Consolidated Statements of Stockholders’ Equity 5
   
Consolidated Statements of Cash Flows 9
   
Notes to the Consolidated Financial Statements 10 – 29

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 17
   

 

SUSTAINABLE PROJECTS GROUP INC.

Consolidated Financial Statements

For the seven months ended December 31, 2018 and 2017 and

For the years ended May 31, 2018 and May 31, 2017

(Stated in US Dollars)

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page 18
   

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of Sustainable Projects Group, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Sustainable Projects Group, Inc. as of December 31, 2018 and May 31, 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the seven months ended December 31, 2018 and the year ended May 31, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and May 31, 2018, and the results of its operations and its cash flows for the for the seven months ended December 31, 2018 and the year ended May 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit, net losses, and negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

We have served as the Company’s auditor since 2018.

 

Spokane, Washington

November 25, 2019

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-1
 

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Stockholders of Sustainable Petroleum Group Inc.:

 

We have audited the accompanying balance sheet of Sustainable Petroleum Group Inc. (the “Company”) as of May 31, 2017, and the related statements of operations, stockholders’ deficit and comprehensive income and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sustainable Petroleum Group, Inc. as of May 31, 2017 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred recurring losses and has an accumulated deficit of $330,382 as at May 31, 2017. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are described in Note 2. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 
   
Toronto, Ontario Chartered Professional Accountants
August 29, 2017 Licensed Public Accountants

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-2
 

 

SUSTAINABLE PROJECTS GROUP INC.

CONSOLIDATED BALANCE SHEETS

 

    December 31,     May 31,     May 31,  
As at   2018     2018     2017  
ASSETS                        
Current Assets:                        
Cash and cash equivalents   $ 249,675     $ 1,419     $ 161,096  
Other receivables – related party - Note 4     596,535       447,400       -  
Interest receivables – Note 4     10,692       6,463       -  
Investments – Note 5     -       26,750       -  
Prepaid expenses and deposits – Note 6     34,160       611,250       6,917  
      891,062       1,093,282       168,013  
Long Term Assets:                        
Note Receivable – Note 4     200,000       200,000       -  
                         
ROU Asset – lease – Note 7     137,819       -       -  
Office Equipment – Note 7     11,561       -       -  
Leasehold improvements – Note 7     5,288       2,041       -  
Mineral properties – Note 8     -       3,473,682       3,750,000  
Intangible assets – Note 9     943,000       400,000       -  
                         
TOTAL ASSETS   $ 2,188,730     $ 5,169,005     $ 3,918,013  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY                        
                         
LIABILITIES                        
CURRENT LIABILITIES:                        
Accounts payable and accrued liabilities – Note 10   $ 149,605     $ 68,949     $ 38,072  
Amount due to directors – Note 14     1,200       12,911       1,293  
Amount due to shareholders – Note 14     12,068       9,833       9,833  
Lease liability - Note 7     52,359       -       -  
Deferred revenue – Note 14     -       25,000       30,000  
Notes payable – Note 11     -       -       253,901  
Interest payable     -       -       48,702  
TOTAL CURRENT LIABILITIES     215,232       116,693       381,801  
                         
LONG TERM LIABILITIES                        
Obligations under operating lease - Note 7   $ 70,195     $ -     $ -  
TOTAL LONG TERM LIABILITIES   $ 70,195     $ -     $ -  
                         
TOTAL CURRENT AND LONG TERM LIABILITIES   $ 285,427     $ 116,693     $ 381,801  
                         
Commitments and Contingencies   $ -     $ -     $ -  
                         
STOCKHOLDERS’ EQUITY                        
Common Stock – Note 12 Par Value: $0.0001 Authorized 500,000,000 shares Common Stock Issued: 7,647,388 (May 31, 2018 - 9,090,018) (May 31, 2017 - 8,263,332)   $ 765     $ 909     $ 826  
Additional Paid in Capital     2,745,145       6,797,682       3,806,170  
Shares subscribed     -       -       59,598  
Accumulated Deficit     (2,108,371 )     (1,746,279 )     (330,382 )
Non-controlling interest – Note 13     1,265,764       -       -  
TOTAL STOCKHOLDERS’ EQUITY     1,903,303       5,052,312       3,536,212  
                         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 2,188,730     $ 5,169,005     $ 3,918,013  

 

See accompanying notes to the consolidated financial statements

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-3
 

 

SUSTAINABLE PROJECTS GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 

    For the seven     For the     For the seven     For the  
    months ended     year ended     months ended     year ended  
    December 31,     May 31,     December 31,     May 31,  
    2018     2018     2017     2017  
Revenues                                
Revenues   $ 278,500     $ 65,000     $ 30,000     $ 5,000  
                                 
Operating Expenses                                
Administrative and other operating expenses   $ 57,721     $ 36,500     $ 21,383     $ 23,719  
Advertising and Promotion     9,616       4,763       3,765       5,559  
Depreciation     4,962       3,208       1,458       -  
Consulting fees     49,500       42,000       24,500       -  
Management fees     56,090       88,040       70,100       3,625  
Professional fees     129,150       113,346       71,514       58,154  
Rent     12,279       3,250       2,000       750  
Salaries and wages     173,805       -       -       -  
Travel     27,423       -       -       -  
Amortized right of use assets     24,117       -       -       -  
Loss/Gain on disposition of assets     1,069       30,596       -       -  
Loss on debt extinguishment     -       76,334       76,334       -  
Loss on acquisition of deposit     -       779,278       779,278       -  
Total Expenses   $ 545,732     $ 1,177,315     $ 1,050,332     $ 91,807  
                                 
Operating income/loss before interest expense and impairment     (267,232 )     (1,112,315 )     (1,020,332 )     (86,807 )
Other interest income     4,229       6,463       2,973       -  
Interest expense     -       (2,727 )     (2,727 )     (14,478 )
Impairment     (168,000 )     (307,318 )     -       -  
                                 
Operating loss before income taxes
including non controlling interests
  $ (431,003 )   $ (1,415,897 )   $ (1,020,086 )   $ (101,285 )
Income Taxes     -       -       -       -  
Net income/loss attributed to non-controlling interest     68,911       -       -       -  
                                 
Net loss and comprehensive loss   $ (362,092 )   $ (1,415,897 )   $ (1,020,086 )   $ (101,285 )
Loss per share of common stock                                
-Basic and diluted   $ (0.040 )   $ (0.160 )   $ (0.116 )   $ (0.014 )
Weighted average no. of shares of common stock                                
-Basic and diluted     9,090,018       8,868,720       8,803,075       7,247,087  

 

See accompanying notes to the consolidated financial statements

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-4
 

 

SUSTAINABLE PROJECTS GROUP INC.

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Seven Months Ended December 31, 2018 and December 31, 2017, and for the Years Ended May 31, 2018

and May 31, 2017

 

          par value     Additional                 Non -        
    Common     at $0.0001     Paid-in     Shares     Accumulated     Controlling        
For December 31, 2018   Shares     Amount     Capital     Subscribed     Deficit     Interests     Total  
                                           
Balance, May 31, 2018     9,090,018     $ 909     $ 6,797,682     $ -     $ (1,746,279 )   $ -     $ 5,052,312  
                                                         
Net loss and comprehensive loss     -       -       -       -       (13,739 )     -       (13,739 )
                                                         
Balance, August 31, 2018     9,090,018     $ 909     $ 6,797,682     $ -     $ (1,760,018 )   $ -     $ 5,038,573  
Non-controlling interests     -       -       -       -       -       884,675       884,675  
Net loss and comprehensive loss     -       -       -       -       (250,460 )     (57,305 )     (307,765 )
                                                         
Balance, November 30, 2018     9,090,018     $ 909     $ 6,797,682     $ -     $ (2,010,478 )   $ 827,370     $ 5,615,483  
                                                         
Shares cancelled for disposal of assets     (400,000 )     (40 )     (611,960 )     -       -       -       (612,000 )
Shares issued at $3.30 per share for debts     10,001       1       33,000       -       -       -       33,001  
Shares cancelled for disposal of assets     (1,052,631 )     (105 )     (3,473,577 )     -       -       -       (3,473,682 )
Non-controlling interests     -       -       -       -       -       450,000       450,000  
Net loss and comprehensive loss     -       -       -       -       (97,893 )     (11,606 )     (109,499 )
                                                         
Balance, December 31, 2018     7,647,388     $ 765     $ 2,745,145     $ -     $ (2,108,371 )   $ 1,265,764     $ 1,903,303  

 

See accompanying notes to the consolidated financial statements

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-5
 

 

SUSTAINABLE PROJECTS GROUP INC.

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Seven Months Ended December 31, 2018 and December 31, 2017, and for the Years Ended May 31, 2018

and May 31, 2017

 

          par value     Additional                    
For May 31, 2018   Common     at $0.0001     Paid-in     Shares     Accumulated        
    Shares     Amount     Capital     Subscribed     Deficit     Total  
Balance, May 31, 2017     8,263,332     $ 826     $ 3,806,170     $ 59,598     $ (330,382 )   $ 3,536,212  
                                                 
Shares issued at $3.50 per share for assets     400,000       40       1,399,960       -       -       1,400,000  
Shares issued at $3.50 per share for assets     6,000       1       20,999       -       -       21,000  
Shares issued at $3.50 per share     31,128       3       108,945       (59,598 )     -       49,350  
Shares issued at $3.50 per share for leasehold
improvements
    10,000       1       34,999       -       -       35,000  
Shares issued at $3.50 per share     78,671       8       275,340       -       -       275,348  
Shares issued at $3.00 per share for debts     101,778       10       381,658       -       (76,334 )     305,334  
Shares issued at $3.50 per share for services     16,000       2       55,998       -       -       56,000  
Subscriptions received at $3.50 per share     -       -       -       107,131       -       107,131  
Net loss and comprehensive loss     -       -       -       -       (869,406 )     (869,406 )
                                                 
Balance, August 31, 2017     8,906,909     $ 891     $ 6,084,069     $ 107,131     $ (1,276,122 )   $ 4,915,969  
                                                 
Shares issued at $3.50 per share     40,609       4       142,127       (107,131 )     -       35,000  
Subscriptions received at $3.50 per share     -       -       -       3,500       -       3,500  
Subscriptions received at $4.00 per share     -       -       -       20,000       -       20,000  
Net loss and comprehensive loss     -       -       -       -       (73,723 )     (73,723 )
                                                 
Balance, November 30, 2017     8,947,518     $ 895     $ 6,226,196     $ 23,500     $ (1,349,845 )   $ 4,900,746  
                                                 
Shares issued at $3.50 per share     1,000       -       3,500       (3,500 )     -       -  
Shares issued at $4.00 per share     5,000       -       20,000       (20,000 )     -       -  
Shares issued at $4.20 per share for assets     10,000       1       41,999       -       -       42,000  
Subscriptions received at $4.00 per share     -       -       -       6,000       -       6,000  
Shares to be issued at $4.00 for debts     -       -       -       100,000       -       100,000  
Net loss and comprehensive loss     -       -       -       -       (311,822 )     (311,822 )
                                                 
Balance, February 28, 2018     8,963,518     $ 896     $ 6,291,695     $ 106,000     $ (1,661,667 )   $ 4,736,924  
                                                 
Shares issued at $4.00 per share     1,500       -       6,000       (6,000 )     -       -  
Shares issued at $4.00 for debts     25,000       3       99,997       (100,000 )     -       -  
Shares issued at $4.00 for assets     100,000       10       399,990       -       -       400,000  
Net loss and comprehensive loss     -       -       -       -       (84,612 )     (84,612 )
                                                 
Balance, May 31, 2018     9,090,018     $ 909     $ 6,797,682     $ -     $ (1,746,279 )   $ 5,052,312  

 

See accompanying notes to the consolidated financial statements

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-6
 

 

SUSTAINABLE PROJECTS GROUP INC.

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Seven Months Ended December 31, 2018 and December 31, 2017, and for the Years Ended May 31, 2018

and May 31, 2017

 

          par value     Additional                    
    Common     at $0.0001     Paid-in     Shares     Accumulated        
For December 31, 2017   Shares     Amount     Capital     Subscribed     Deficit     Total  
                                     
Balance, May 31, 2017     8,263,332     $ 826     $ 3,806,170     $ 59,598     $ (330,382 )   $ 3,536,212  
                                                 
Shares issued at $3.50 per share for assets     400,000       40       1,399,960       -       -       1,400,000  
Shares issued at $3.50 per share for assets     6,000       1       20,999       -       -       21,000  
Shares issued at $3.50 per share     31,128       3       108,945       (59,598 )     -       49,350  
Shares issued at $3.50 per share for services     10,000       1       34,999       -       -       35,000  
Shares issued at $3.50 per share     78,671       8       275,340       -       -       275,348  
Shares issued at $3.00 per share for debts     101,778       10       381,658       -       (76,334 )     305,334  
Shares issued at $3.50 per share for services     16,000       2       55,998       -       -       56,000  
Subscriptions received at $3.50 per share     -       -       -       107,131       -       107,131  
Net loss and comprehensive loss     -       -       -       -       (869,406 )     (869,406 )
                                                 
Balance, August 31, 2017     8,906,909     $ 891     $ 6,084,069     $ 107,131     $ (1,276,122 )   $ 4,915,969  
                                                 
Shares issued at $3.50 per share     40,609       4       142,127       (107,131 )     -       35,000  
Subscriptions received at $3.50 per share     -       -       -       3,500       -       3,500  
Subscriptions received at $4.00 per share     -       -       -       20,000       -       20,000  
Net loss and comprehensive loss     -       -       -       -       (73,723 )     (73,723 )
                                                 
Balance, November 30, 2017     8,947,518     $ 895     $ 6,226,196     $ 23,500     $ (1,349,845 )   $ 4,900,746  
                                                 
Shares issued at $3.50 per share     1,000       -       3,500       (3,500 )     -       -  
Shares issued at $4.00 per share     5,000       -       20,000       (20,000 )     -       -  
Shares to be issued at $4.00 for debts     -       -       -       100,000       -       100,000  
Net loss and comprehensive loss     -       -       -       -       (624 )     (624 )
                                                 
Balance, December 31, 2017     8,953,518     $ 895     $ 6,249,696     $ 100,000     $ (1,350,469 )   $ 5,000,122  

 

See accompanying notes to the consolidated financial statements

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-7
 

 

SUSTAINABLE PROJECTS GROUP INC.

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Seven Months Ended December 31, 2018 and December 31, 2017, and for the Years Ended May 31, 2018

and May 31, 2017

 

          par value     Additional                    
    Common     at $0.0001     Paid-in     Shares     Accumulated        
For May 31, 2017   Shares     Amount     Capital     Subscribed     Deficit     Total  
                                     
Balance, May 31, 2016     7,000,000     $ 700     $ 16,300     $ -     $ (229,097 )   $ (212,097 )
Net loss and comprehensive loss     -       -       -       -       (19,732 )     (19,732 )
                                                 
Balance, August 31, 2016     7,000,000     $ 700     $ 16,300     $ -     $ (248,829 )   $ (231,829 )
Net loss and comprehensive loss     -       -       -       -       (26,265 )     (26,265 )
                                                 
Balance, November 30, 2016     7,000,000     $ 700     $ 16,300     $ -     $ (275,094 )   $ (258,094 )
Net loss and comprehensive loss     -       -       -       -       (8,188 )     (8,188 )
                                                 
Balance, February 28, 2017     7,000,000     $ 700     $ 16,300     $ -     $ (283,282 )   $ (266,282 )
                                                 
Shares issued at $3.00 per share     1,250,000       125       3,749,875       -       -       3,750,000  
Shares issued at $3.00 per share     13,332       1       39,995       -       -       39,996  
Shares subscribed at $3.50 per share     -       -       -       59,598       -       59,598  
Net loss and comprehensive loss     -       -       -       -       (47,100 )     (47,100 )
                                                 
Balance, May 31, 2017     8,263,332     $ 826     $ 3,806,170     $ 59,598     $ (330,382 )   $ 3,536,212  

 

See accompanying notes to the consolidated financial statements

 

Sustainable Projects Group Inc. Form 10-K - 2018 - Transition Page F-8
 

 

SUSTAINABLE PROJECTS GROUP INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

    For the seven     For the     For the seven     For the  
    months ended     year ended     months ended     year ended  
    Dec 31 2018     May 31 2018     Dec 31 2017     May 31 2017  
                         
Cash Flows from operating activities:                                
Net loss and comprehensive loss
Including non controlling interests
  $ (431,003 )   $ (1,415,897 )   $ (1,020,086 )   $ (101,285 )
Adjustments to reconcile net income(loss) to net cash used in operating activities:                                
Loss on debt extinguishment     -       76,334       76,334       -  
Loss on acquisition of deposit     -       779,278       779,278       -  
Loss on disposition of asset     -       29,750       -       -  
Gain on disposition of asset     -       846       -       -  
Impairment on mineral properties     -       276,318       -       -  
Impairment on intangible asset     168,000       -       -       -  
Impairment on investments     -       31,000       -       -  
Depreciation     4,962       3,208       1,458       -  
Interest on receivables     (4,229 )     (6,463 )     (2,972 )     -